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2890662.3 19 <br />7.5 Effect of Transfer without City Consent. <br />7.5.1 In the absence of specific written agreement by the City, no Transfer by <br />Developer shall be deemed to relieve the Developer or any other party from any obligation under <br />this Agreement or the Regulatory Agreement. <br />7.5.2 Without limiting any other remedy City may have under this Agreement, <br />or under law or equity, this Agreement may be terminated by City if without the prior written <br />approval of the City, Developer assigns or Transfers this Agreement or the Property prior to the <br />City’s issuance of a Certificate of Completion. This Section 7.5.2 shall not apply to Transfers <br />described in clauses (i) through (iv) of Section 7.3). <br />7.6 Recovery of City Costs. Developer shall reimburse City for all costs, including <br />but not limited to attorneys’ fees, incurred in reviewing instruments and other legal documents <br />proposed to affect a Transfer under this Agreement and in reviewing the qualifications and <br />financial resources of a proposed successor, assignee, or transferee within ten days following <br />City’s delivery to Developer of an invoice detailing such costs. This Section 7.6 shall not apply <br />to Transfers described in Section 7.3. <br />ARTICLE VIII <br />SECURITY FINANCING AND RIGHTS OF MORTGAGEES <br />8.1 Mortgages and Deeds of Trust for Development. Mortgages and deeds of trust, or <br />any other reasonable security instrument are permitted to be placed upon the Property only for <br />the purpose of securing loans approved pursuant to the approved Financing Plan for the purpose <br />of financing the acquisition of the Property, the design and construction of the Improvements, <br />other expenditures reasonably necessary for development of the Property pursuant to this <br />Agreement, and the rehabilitation and/or refinancing of the Project. Developer shall not enter <br />into any conveyance for such financing without the prior written approval of the City Manager or <br />his or her designee. As used herein, the terms “mortgage” and “deed of trust” shall mean any <br />security instrument used in financing real estate acquisition, construction and land development. <br />8.1.1 Memorandum and Regulatory Agreement to be Senior to Mortgages. City <br />agree that if required by construction and/or permanent lenders the Memorandum of this <br />Agreement and the Regulatory Agreement may be subordinated to deeds of trust or other <br />security instruments approved by the City pursuant to a written instrument conforming to the <br />requirements of California Health and Safety Code Section 33334.14(a)(4) and including without <br />limitation, the provisions set forth in Section 8.4 below. <br />8.2 Holder Not Obligated to Construct. The holder of any mortgage, deed of trust <br />authorized by this Agreement shall not be obligated to construct or complete the Improvements <br />or to guarantee such construction or completion. Nothing in this Agreement shall be deemed to <br />permit or authorize any such holder to devote the Property or any portion thereof to any uses, or <br />to construct any improvements thereon, other than those uses or improvements provided for or <br />authorized by this Agreement. <br />41